RCP holds close on distressed opportunities overflow fund

RCP Advisors was targeting a summer final close for its $150m overage fund, which will invest alongside its flagship secondaries fund in coronavirus-induced opportunities.

RCP Advisors has held an interim close on a fund raised to take advantage of opportunities brought about by coronavirus.

The Chicago-headquartered fund of funds manager has raised $58.4 million for RCP SOF III Overage Fund from 52 separate investors, according to a filing with the US Securities and Exchange Commission. The fund is targeting $150 million with the manager reserving the right to raise more or less.

According to a May investor presentation hosted by RCP, SOF III Overage Fund will invest along the 2017-vintage Secondary Opportunity Fund III, allowing the firm to take down large deals without a co-investor. RCP’s flagship secondaries funds can invest up to $30 million per deal and have a single-asset concentration limit of 3 percent.

“Many times [in the past], either the seller, the GP or the agent will decide they only want the piece going to one seller, which puts us at a disadvantage,” said vice-president of business development and investor relations, Mike Rice, on the presentation.

Managing partner Jon Madorsky said that he expects to see a rise in forced sellers from August onward, with endowments and foundations particularly likely to need liquidity: “With tuition possibly going down, with school cancelled or online, they are seeing shortfalls in their budget.”

The fund was expected to hold an interim close in June with final close in July or August, according to the presentation. RCP did not respond to a question as to whether dealflow has materialised in the way that was anticipated. The firm only charges fees on invested capital, not on commitments.

SOF III raised $400 million by final close in March last year from LPs such as The Herbert H. and Grace A. Dow Foundation and The Community Foundation of North Louisiana, according to Secondaries Investor data.

RCP has $9.1 billion in committed capital across funds of funds, secondaries, co-investments and private credit, according to its website.